Drumbeat: January 18, 2010

(Bloomberg) -- Goldman Sachs Group Inc. said that shortages will reappear in the crude oil market as supply fails to keep pace with a recovery in demand.

Global oil consumption will return to levels seen before the financial crisis by the third quarter of this year, Goldman analyst Jeffrey Currie said in a presentation in London today. At the same time, projects to bring new oil to consumers are still lagging as a result of the credit crunch, he said.

“By 2011, the market is back to capacity constraints,” Currie said in slides shown with the presentation. “The financial crisis created a collapse in company returns which has significantly interrupted the investment phase.”

U.S. Energy Secretary Steven Chu said Friday he would not favor a ban on "fracking," a now-common drilling method that XTO Energy (XTO) and other natural-gas companies use to produce gas from hard shale-rock formations that have recently become a major source of natural gas.

Critics contend the practice can cause pollution, especially in drinking water. The industry rejects that charge.

(Bloomberg) -- PT Pertamina may increase imports of gasoline, diesel and jet fuel after the state company shut down a processing unit at its Balikpapan refinery because of a fire, Basuki Trikora Putra, a company spokesman, said.

Pertamina’s fuel output dropped by 27,500 barrels a day because of the shutdown and the refinery’s unit may stay shut for several days for repairs, Putra said in Jakarta today. The fire occurred at the so-called Reboiler Hydrocracker A-Train unit on Jan. 16 at about 9:15 p.m. local time, he said, adding the cause of the fire is being investigated.

The estimated number of U.S. oil and natural gas wells and dry holes completed in 2009 -- 39,068 -- was 37 percent lower than 2008, but fourth-quarter totals of 10,609 completions were 19 percent higher than the third quarter, which in turn had been up 6 percent from the second quarter, API's fourth-quarter drilling estimates indicate.

(Bloomberg) -- Tullow Oil Plc plans to bring in one or two partners to help with the estimated $5 billion cost of developing its Ugandan assets after derailing Eni SpA’s attempt to gain a foothold in the east African nation.

A growing number of supply options for Asian LNG customers could hurt the prices producers receive and give buyers the advantage in contract negotiations, Mark Hume, a Merrill Lynch analyst based in Sydney, wrote in a report to clients.

With an intensifying battle with terror in the tribal regions, a severe winter made worse by an equally severe energy crisis, and a weakened government plagued by corruption and unwilling to embrace transparency, the public has had enough.

Brussels - The European Union has signed a strategic energy partnership with Iraq, in a move that could contribute to the EU's energy diversification plans, the European Commission announced on Monday.

Iraq has the world's third largest proven oil reserves and could become a gas supplier for the Nabucco pipeline, the EU's flagship project for the development of the so-called Southern Corridor energy supply route aimed at reducing dependence on Russia.

KUALA LUMPUR - Malaysian glove makers who supply about two-thirds of the global market may not be able to keep pace with strong demand due to a natural gas shortage in the Southeast Asian country, a top industry official said on Monday.

(Bloomberg) -- Larsen & Toubro Ltd., India’s biggest engineering company, may borrow as much as $4.4 billion to build a power-generation business and is considering buying coalmines in Australia and Indonesia to gain fuel supplies.

It's a tragedy for the ages, and tragedy is a fulcrum of the human condition that techno-triumphalism pretends to have vanquished. All the meals-ready-to-eat on God's green earth won't add up to a happy ending for everybody. Haiti was a disaster waiting to happen every bit as much as the Federal Reserve is for us. For decades, the USA's policy (and the UN's too) was just to stuff more food aid onto an island already so far beyond its carrying capacity for human existence that every new birth certificate was a death warrant in disguise. But free people are free to do what they will do, and in Haiti there was not much more to do than make more people.

Now the USA will also pretend that there is a Haitian government in charge -- as in the pathetic grandstanding of Secretary of State Hillary Clinton the other day -- though the Haitian government was a fiction for decades before the earthquake struck. The recent blatherings of Bill Clinton would have us believe that Haiti is poised to become an exemplar of economic development for the Caribbean once things are tidied up there. What planet are these people living on? (Answer: Planet Limousine.) Rather Haiti is the example of what life may become in nations bethinking themselves developed further along in The Long Emergency. If the figures on world crop failures for 2009 are relevant, even places like the USA may get a taste of this before the end of 2010.

We are not in a position to face down the ocean, saying "This far, Ocean, and not a centimetre further!" Our worst-case scenario is that our worst-case scenario is going to continue getting worse and worse. We cannot limit our planning activities to this or that mythical upper bound. When our knowledge fails us, our myths are there to guide us. The success of Noah's mission did not depend on having an accurate estimate of how high the waters would rise, because his arc floated.

When Labour's £180bn, 10-year transport plan was unveiled by John Prescott in 2000, there were high expectations that it was to usher in a new era of light rail, road pricing and a much-improved bus service. So what happened?

For your edification this long weekend: In this posting, we return to address in greater detail the faulty assumptions underlying the conclusion by the National Research Council's (NRC) fuel cell analyst team that it would be a mistake to commit to plug-in vehicles because battery costs will remain high for over a decade.This report has gained wide attention. And on the same day that GM opened its new Michigan battery plant, the Boston Consulting Group (BCG) released a study saying it would take decades for plug-ins to become competitive without subsidies.

We believe BOTH reports are mistaken and are already being eclipsed by industry developments.

LONDON (Reuters) - Europe is set to add about 1,000 megawatts of new wind power capacity in 2010 but tight credit could limit further investment in the low-carbon technology, the European Wind Energy Association (EWEA) said on Monday.

Eight new wind farms totalling about 577 MW, including 199 offshore wind turbines, were connected to the grid in Europe last year, compared with 373 MW installed during 2008.

(Bloomberg) -- Efforts to boost production of renewable energy in Germany means the amount of land used to generate power and heat from corn, solar panels and wind turbines will more than double by 2020.

Anthony Watts runs a Web site that has become perhaps the most popular portal for climate news and opinion of interest to people aiming to rebut warnings that humans are poised to disrupt climate. James E. Hansen of NASA has long been the most prominent scientist advocating sharp and prompt cuts in emissions of greenhouse gases to avoid a climatic calamity.

In the last few days, a notable conjunction occurred when these two men essentially agreed on something: that the planet — despite a lot of very cold patches — is unusually warm.

Remember the summer of 2008, when oil was approaching $150 per barrel and topping the headlines? The oil story quickly faded to the background when the financial crisis hit full-steam that September; we had bigger things to worry about in terms of the potential collapse of the worldwide financial system. Meanwhile, the deepening recession greatly reduced demand for oil. The price per barrel fell precipitously.

But while the world is awash in an excess supply of oil at the moment, I am convinced that the supply/demand balance of oil over the longer term is a critical issue that bears watching.

Oil is so important because it is, at the moment, the primary source of transportation fuel, and transport costs affect the entire economy. Low oil prices cut the cost of doing business and help reduce geographic barriers, while high oil prices act as a "tax" on the entire system and force us to act more locally.

I recently sat down with a group of Morningstar's energy analysts to discuss the idea of "peak oil." In this article, I will define the issue and share the group's insights.

The American press probably hardly noticed but southern France has experienced a major blackout around Christmas and in my own region – Brittany - local authorities have urged people to reduce their power consumption, lest the whole regional grid catastrophically fail. The lights are still on in the small Breton village I am writing this from, but it is probably a matter of time before they go off. No matter what nuclear power fans say on the other side of the Atlantic, French power plants are not aging well. They need more maintenance, and this takes longer. To make things worse, EDF, the French national power company has outsourced most of said maintenance to independent contractors whose employees are less paid and less well treated than its own. The result has been a row of strikes, which paralyzed operations and forced EDF to delay maintenance until the end of the year.

France, which used to be a major power exporter has now become a net importer and since the grid is undersized, this is becoming a real problem for those of us who don't live near a power plant. In Brittany, where the population has refused – and is still refusing – nuclear power, this has become a major political subject – we are nearing a regional election, remember – and local politicians are pushing for the building of a gas power plant on the northern coast. Another – built in a low-lying coastal area - will be put on line in a few days, but everybody agrees it won't be enough and that we are only a cold day away from darkness.

TEHRAN (Reuters) - OPEC members achieved a 66 percent compliance last year with agreed crude output targets, a senior Iranian oil official was quoted as saying on Sunday, describing it as a "success".

The producer group decided at a Dec. 22 meeting in Angola to keep its output policy unchanged, but faces a battle to crack down on those in its ranks who are failing to comply with quotas if it wants to drain fuel stocks.

The “gas crunch” identified in your report is probably going to be matched, or exceeded, in its effect on the UK economy by a similar “oil crunch”. This prospect was first identified by the Industry Task Force on Peak Oil and Energy Security (ITPOES) in its report dated October 2008. Oil supply has very similar characteristics to gas, except that the run-down in indigenous production is more advanced and the availability of oil is more limited with respect to future demand. (The ability to extract “tight” gas from shale, at economic prices, has transformed the near-term international prospects for future gas supply.)

CARACAS (Reuters) - Venezuela's Mariscal Sucre project, which has estimated reserves of 14.7 trillion cubic feet of gas, has failed to attract private interest after the government invited firms to make offers last week.

SINGAPORE (Reuters) - Brazil's state-run Petrobras plans to sell as much as 2 million barrels of its medium-sweet crude to Asia every two months, using storage tanks it owns in Japan's Okinawa island as a distribution hub, trade sources said on Monday.

Petrobras expects to send its first Very Large Crude Carrier (VLCC) loaded with Roncador crude from Brazil to Okinawa in March, with subsequent shipments of the same size about every two months, heralding a new trading strategy, the sources said.

The complaints of Opec ministers over the years went largely answered by demands to increase production by IEA and consumer governments against the fundamentals of the market until the financial and economic crises gripped the world in the middle of 2008.

BEIJING: China's power consumption would rise 7 percent this year if the country could maintain an 8-percent growth of economy, Wang Xudong, chief of the State Electricity Regulatory Commission (SERC), said here Monday.

How then to run a complex, modern industrial society along principles conceived by Morris? The simple answer is you can't. But in a society beset by the problems of peaking fossil fuels, climate change, deforestation, depletion of water, destruction of fisheries, and erosion of farmland, Morris sounds like a person in the vanguard of the sustainability movement. Even more famous during his life for his novels than for his tapestries and stained glass work, Morris described the kind of society he deemed consistent with his principles in a utopian novel entitled News from Nowhere.

News from Nowhere describes a highly decentralized craft- and agricultural-based society of small towns and villages, one with democratic governance and equality of the sexes. Using the trope of a man visiting the future--200 years into the future to be precise--we get not only a description of the current conditions, but also a history of how the world evolved to that point.

News from Nowhere is not a literary masterpiece. But it offers a useful look into the mind of a man who thought deeply about the relationship between the way we organize the economy and the way we structure society. And, he offered a radical vision that sounds very much like the radical vision of those now proposing the relocalization of human society in response to the myriad challenges we face to our very survival as a species.

When I posted on a video tour of my friend Mike Feingold's permaculture allotment, many folks were inspired by his haphazard yet productive approach to urban gardening. But others just felt he looked like the Unabomber. And when Warren posted on the Greening the Desert permaculture project in Jordan, some were fired up, while others dismissed permaculture as just another form of survivalism. So what will folks make of Ian Graham's permaculture farm in Canada? A man who on the one hand is growing food with minimal fossil fuels, and on the other hand seems to believe that we are all doomed. (As an irrelevant but amusing aside, his sheepdog seems to be scared of sheep.)

The land-use rebellion now unfolding in Markham is another skirmish in the war against the development industry.

At stake is who controls growth – government or industry?

Though some would have us believe that the end of suburbia represents a clash of cultures, an attack on middle-class virtues and market infallibility, it has more to do with wresting public powers from private hands.

There may be a global freeze on at the moment but Britons who own and let flats and chalets at ski resorts could face a threat to their investments – thanks to a long-term shortage of snow.

Recent weeks have seen huge snowfalls in the UK, on mainland Europe and across North America, but research by Unesco's environment programme suggests long-term global warming will push the snowline up worldwide in years to come.

Responding to renewed interest in geoengineering schemes to combat global warming, scientists and policymakers are beginning several efforts that could set new ground rules for research, including large-scale field experiments.

The trick is this: Companies need oil to be above $60 or so to bring new production online. So we're on a narrow plank between the price required to bring on new production and the price that throws us back into a recession. And as we continue to push the frontier and supply tightens, the price to bring new production online begins to increase and the plank narrows. What do we do when producers require $80 oil to add new production, but oil prices that high keep us at recession's edge? We're certainly in a box that will be painful, but not impossible, to get out of.

By far the largest field discovered in the last decade was Kashagan in Kazakhstan, with an estimated 10 to 15 billion barrels of recoverable oil. Goldman Sachs estimates that it will take form $100 to $110 a barrel to bring develope and bring that oil to market. That is, in my opinion, well above the "recession tipping point". If we reach that price again, and we likely will, that will not just keep us in a recession but drive the recession much deeper.

People simply have not come to the realization that this is a peak oil recession. It is a worldwide recession not just a US recession. The recession in Japan, Germany and the rest of the world was not caused by the sub-prime mortgage crisis in the US it was caused by a world oil price of over $100 a barrel. And there will be no recovery until oil prices fall well below $60 a barrel. And I just don't believe that is about to happen.

there will be no recovery until oil prices fall well below $60 a barrel.

I would say there will be no recovery unless energy in total becomes more affordable, $60 oil may be more affordable for society at today's wages and efficiency of use but in a deflationary, high unemployment, situation maybe not.

He didn't give any examples of how we might "get out of the box." Can you think of some?

My list -- not exhaustive, but only #5 seems to have any long-term adaptability:

1. Cut population. More $ and hydrocarbons/capita
2. Reduce consumption. Multiple ways, but the market seems to favor increasing production of slums and destitution.
3. Find oil in the Earth's mantle, where it is produced
4. Make oil from (e.g.) straw, trees, algae, coconuts, switchgrass
5. Get out of the schoolyard: stop warring and learn to share.

Yeah right! And just how do you do that within the lifespan of people reading this list? Shoot people?

Reduce life expectancy and reduce births. The Soviet > Russian transition managed to cut almost a dozen years off the male life expectancy.

In the USA, pulling government back from health care and letting profitable corporations run it should help quite a bit (more corporate income taxes, fewer taxes spent). Reducing housing subsidies and food stamps could do even more. All good ways to finance more tax cuts.

Forcing parents to pay for pre-natal care, childbirth and early childhood care (no more CHIPS & WIC) should reduce family sizes.

So the simple answer is VOTE REPUBLICAN (Rush endorsed only of course).

Best Hopes for Sarconol & Truth mixed,

Alan

PS: Increased bicycling will bankrupt Social Security. People that bicycle to work live an average of a decade longer than those that do not. One negative of increased Non-Oil Transportation.

Damn Alan, why didn't I think of that? And of course we should encourage more people to smoke and drink more alcohol. Then deny them any medical care for lung or liver disease that might result. After all it would be all their own fault.

And then we could stop enforcing any and all building codes. That way earthquakes and other natural disasters kill a lot more people. Then we could stop all immunizations and outlaw such things as penicillin.

The strongest witness is the vast population of the Earth to which we are a burden and she can scarcely provide for our needs; as our demands grow greater, our complaints against nature ’s inadequacy are heard by all. The scourges of pestilence, famine, wars, and earthquakes have come to be regarded as a blessing to overcrowded nations since they serve to prune away the luxuriant growth of the human race.

Tertullian was a notable early Christian apologist. (160-220 AD) World population was probably less than one million when Tertullian wrote those words.

World population was approximately 200 million during the Roman empire era. The population of Rome itself peaked during the Roman Empire period, with estimates ranging from 450,000 to over 3,500,000 population. The most common estimates of Rome's population focus around 1 million inhabitants.

After the collapse of the Roman Empire, global population grew slowly but steadily to over 300 million in 1000 AD and then on to about 750 million by the early 18th century. From there it more than doubled in 200 years to about 1.6 billion by about 1900. Since 1900 global population has exploded upwards, doubling more than twice in the last century.

Did our best to outlive our social security today by riding the bike. And even better it was 53 degrees F. in NE Wash State on Jan 18th.
I know there is a dark cloud around both those items but today it was about the silver lining.

Here's something I don't understand: people seem to think that reducing life expectancy is a significantly useful way to reduce resource usage. But my general observation is that proportionately a young person or child will consume much more resources of all kinds than ah older person prior to the time they need intensive care (in my observation partly due to the belief the young have that having item X, Y, Z, etc, or doing activity A, B, C, etc, will make you happy and partly because young people have more energy to consume stuff with). Even at the point of requiring intensive care it looks like the only "resources" they use intensively are economic and human-time (medication is expensive for intellectual reasons rather than physical reasons, cardiac monitors don't use more energy than watching a plasma TV, etc).

I'd imagine that one way to signficantly reduce resource usage would be to figure out medical ways for 40-50 year old women to safely have healthy babies. (May well not be possible of course.)

A catastrophe will start the process rolling -- look at Haiti ...
If the help doesn't come soon enough -- all hell will break loose.
At this point of our world history, we still "have" some "extra"
resource capacity to help our neighbors. This won't continue to
be so.

I just wonder: 100 dollar per barrel, will this price make, let's say wind energy, already competitive? In the Netherlands the electricity price is fixed to the oil price, but I don't know exactly the reason... If so, the author might be right: a hundred dollar a barrel would almost be an ideal price for a decade or so. Just not high enough to trigger a recession (hopefully, who knows?), and high enough to boost energy efficiency, energy saving and alternative energy sources (if we can do it quick enough).

What do we do when Houston requires $80 oil to add new production, but oil prices that high keep us at recession's edge? We're certainly in a box that will be painful, but not impossible, to get out of.

Perhaps not impossible; how about highly improbable, given our history?

The given in the establishment's argument is continually expanding demand and consumption. With demand expanding, prices of available fuel - and marketable reserves - are bid up. The current problem, not tomorrow's, is the expanding population of machines built to consume energy and the platform that supports this machine 'population explosion'.

For example, having tens of thousands of miles of new Chinese freeways creates more demand, even if the consumption isn't keeping up at the moment, the desire to use the new freeways increases with each destination created. Desire translates into car and house purchases, store and other destination 'development'. This 'waste gatekeeping' is only profitable in the sense that cars, roads and destinations can be sold, but there is no energy (or efficiency) returns on the sales. Increasing demand that bids up oil prices simultaneously decreases the profit potential of the goods in question. Adding demand is simple economic suicide.

The economy of scale that manufacturing allows is an outcome of cheap energy inputs; rising costs makes the scale economy too expensive and unprofitable. Our US economy is living this experiment of decreasing energy price efficiency which is proving to be - uh - unpleasant. Am I missing something/wrong?

Stringent energy conservation - to one/third of current levels in the US - would have the same effect as a population decline. Machines consume more calories than do humans while enabling at the same time direct human consumption in the form of food and other basic inputs. Conservation would force a population- reduction of oil- consuming machines. Unlike HUMAN population control, which requires a high and sophisticated level of coercion, machine- energy conservation is simple: it has been done, it is being done in an ad- hoc manner in the US and in other developed countries right now and the means are simple and at hand.

Let slip the taxman; let him tax and tax some more.

A retail energy tax of $300/barrel or an equivalent import duty plus a $100/ton carbon tax and energy use will melt away wasteful consumption. A Twenty- five dollar tax on each gallon of gasoline would cut gas use in half at least. Such a tax would be a cheap price to pay for putting the economy back into some semi- functioning balance. If $25/gallon is insufficient, make it $45 a gallon.

Such levies would be be simple to enact but unpopular. So damned what!? At some point the government(s) must start taking steps as the future of governments themselves is at stake. Energy is a part of climate: replace coal fired power generation with natural gas, institute odd- even and 'letter' rationing systems (as in World War Two), enforce LOW mandatory speed limits (with engine speed governors); initiate feed- in tariffs, medallion systems for autos and trucks (which would raise tens of billions of dollars in additional fees), automation taxes, stringent import duties on energy embedded in cheap manufactured imports, 'no fly' periods (and reining in military aviation), increase levies on maritime and agricultural fuel/chemical use ... and so on.

There are 20 million unemployed who can be turned to labor plus another 30 million idling away at 'retirement' that can also be turned to labor. There is no end to the tasks in this country that need to be done! The country could find and put to the plow one million new farmers (and their families) as well as subsides craft work, artisan shops and a whole range of local revival initiatives. Building new railroads and rail transit systems nationwide and electrifying them - and doing so by craft methods - would employ hundreds of thousands and build a skill base that does not exist in the country currently.

The establishment 'solution' to unemployment is 'stimulus' to big business, the dole, 'benefits', welfare ... until such initiatives funded by debt become unaffordable ... poverty. What a choice the establishment offers!

Get the cars off the roads, get asses off couches and out of front seats, get rid of televisions, get rid of fast food and take direct aim to destroy so- called 'modern (machine) culture' that has made lazy, stupid bastards out of so many of us.

Conserve energy and the problems of today that are founded in energy depletion - and the accompanying climate issues - will start to take giant steps backward.

I'll volunteer to be President for 48 hours and I will show the current crew how it is done. First thing I will do is fire the Secretary of Energy Department. Then I'll fire the Treasury Secretary, then the Secretary of State and Attorney General, the DOD chief, all the Joint Chiefs, the FBI chief, the Transportation chief, the head of the CIA, the head of the Department of Homeland Security; I would give Ben Bernanke 24 hours to clean out his desk or I will, "make your life so miserable that out of despair ... you will hang yourself with an electric cord, in your living room in front of your wife!"

When I fire these jackasses on television, the public will perk up ... and pay attention!

I would suspend all bailouts and demand an account of all taxpayer funds distributed within the context of a seven- day bank holiday. I would close the airports and other points of entry to prevent any 'persons of interest' from leaving the country as well as freeze all dollar assets both domestic and overseas that is relevant to the bailouts and Federal Reserve liquidity operations. I suspect there are hundreds of billions of dollars sloshing away in tax haven banks in places such as Monaco, Zürich, Liechtenstein and Curacao.

I'd hire Ed Gray as Treasury Secretary, Andrew Cuomo as Attorney General and Elliot Spitzer as Special Prosecutor charged with cleaning house on Wall Street. If he did what I should expect him to do, I'd drive the hookers over to his house, myself. I'd hire 25,000 new Assistant US Attorneys and double the size of the FBI. I'd have said FBI raid the Federal Reserve and collect all documents relating to 'lending facilities' and 'non- recourse loans'. I'd empty the prisons and refill them with crooked bankers, swindlers, real estate touts, Ponzi operators, derivatives and mortgage fraudsters, laundered dollar- traffickers, looters of the Treasury and the Federal Reserve, I'd spare no one, including ex- President(s), ex- Treasury Secretaries, members of Congress and the Senate. State and local governments would get assistance to prosecute 'official' thieves at those levels of government. Unrecoverable looted funds overseas would be repudiated.

Long prison terms would serve to warn others.

I'd put troops around the Capital and the Supreme Court - to keep the inmates in and the lobbyists out - and put the (corrupt) politicians' noses to the grindstone. I wouldn't care if they were Democrats or Republicans: the peoples' business would be done ... or else! I'd have a caterer bring in bottled water and tuna- fish sandwiches and allow escorted trips to the can. Congress would do their job or never leave; the members could die of old age and disease in the Capital and I would not care!

If the Supremes give me any problem, I'll cut the power and air conditioning and heat. Staffers and Justices can work in discomfort in the dark.

A lot of people would be arrested, a huge number would be picked up at airports fleeing the country; business big shots, bankers, ex- Presidents, currency speculators, agency racketeers; many more would be detained, have assets frozen, would be investigated, suffer sanctions and otherwise be called to account. I could do more in 48 lousy, stinking hours than that useless Wall Street piece of crap/lackey Obama has done in his entire career.

They ... the establishment ... would fear me. The people cry out for justice. Better me than them. The people will burn the establishment at the stake, whoever they get their hands on.

Obama is useless, he's worse than Bush; I would open eligibility to Medicare to all citizens for 180 days by executive order under the Patriot Act. In 180 days the insurance and medical 'industries' would either be bankrupt or close and begging for relief. (If lobbyists approached Congress, they would be detained on terrorism grounds and sent to Guantanamo.) Congress could go home after its work is done; a 100 days should do the trick and get government out of the pockets of the business and banker cartels.

I'd declare OPEC a criminal organization, freeze its assets and have Interpol arrest its officials on sight.

I would end the US wars in the Middle East in 90 days (we won, already), close the Mexican border, deport all without papers (or charge them to stay), end income/labor taxation, close about half the government agencies, cut the budget. I'm a 'localist'; I'd end NAFTA and exit NATO and the WTO, add energy/carbon duties to imports (and repudiate overseas dollar holdings if anyone give me a hard time about it), reform/simplify the military, ban private armies, initiate conscription (and end residual unemployment at the same time), fund a Thorium power initiative, fund a nationwide watershed repair project, fund solar and wind projects, end discrimination against homosexuals and decriminalize all recreational drugs. I would sell excess oil production overseas for hard currency (rare earths and metals) depending on eliminating car use in the importing countries, open relations with Cuba, start a nuclear arms reduction initiative, cut all funding to Israel until satisfactory agreements are reached with ALL its neighbors.

I would be brutally honest with the public from the get- go about oil, climate and credit. I don't think there would be a public issue with the honesty. The public would cheer as I rounded up the criminal class that has taken over this country.

Leadership is hard, you have to (a) piss people off and (b) throw the absolute ******* fear of God into them. Otherwise, nobody will do anything but sit on their asses and complain.

When the US finally embraces a stringent conservation program, the rest of the world will instantly stand up and take notice. The US will lead again! A lot of the imbalances that are currently amplifying toward the 'breakdown mode' will begin to rebalance. The US moving to take its energy and climate situation seriously would also begin to gain some leeway on resolving its credit 'issues'. These left to current inertia and inaction will cause either a worldwide currency crisis or debt service crisis shortly. This will then cause the conservation and do so in the most painful way possible.

I`m not sure if anyone, no matter how powerful, can create a change in the status quo....
the people who would work as laborers would have to eat and the problem would be how to feed them economically.
Since there hasn`t yet been a complete breakdown in the system, we can assume that the profit is still there when the baker sells a loaf of bread produced under a petroleum-based energy regime.
So people can`t work profitably as laborers until they produce more than they eat. They still can`t compete with oil-fed machines, I`m guessing.
I`m not really sure of the math, but it seems that things have to come to a stop of some sort on their own before they restart under a new energy regime.
But this stop could be short and if there were some plans to help things pick up the pieces soon afterwards then maybe it would be O.K.

I don't have much to say around here anymore(I have other fish to fry), BUT I do want to thank you for having the courage to 'tell it like it is'. Wish there were more of your demeanor and outspoken truthfullness on TOD.

However the censorship stamp is alive and well and with the NEW flagging method just a very few can make up a cabal and delete as many posts as they jolly well wish. Even this post may be flagged as well and disappear into the aether.

Thanks again and don't let the bastards wear you down too much,

Airdale-here is Best Hopes for a Scott Brown victory in MA. We need less and less of Big GOV in our faces, not more.

Censorship by flagging is an unknown by the poster whose comment was flagged and deleted. Why? Who did it offend? Was it outside the 'rules'? And more questions can arise such as who flags the most? Is there a pattern? Is there possibly a cabal...say of Bush haters who take flagging action? Or those whose ox is being gored and want to retaliate? What about the posts below the disappearing one disapperaing as well? Is that kosher?

I have hated the flagging system since it started for the above reasons. I much preferred the post to remain and be given upticks and downticks. That got the message across.

Suppose I slight a politician? Then that person and a few of their supporters deem it should be flagged? Politics anyone? A secret ballot of a sort that removes all contention and discussion even though it might be a bit over the line(what line?).

I spend way too much time here on the Drum nowadays but I haven't been here long enough to know how it used to be.

I can say that over the last few months I have seen very few legit comments disappear maybe half a dozen or so, and all of them were either profane or way out of line in some other way as getting off in debating whether the Holocaust was real or fictional-this is not the place for that.

I have flagged numerous advertisement comments myself-probably a dozen in the last few months.They hardly ever stay up more than a few minutes. The system in place now works well in this respect at least.

Great post R.P. That's the conundrum, the fine line, the razors edge we are approaching, as the world economy weakens in an ongoing recession due to high priced energy, we undercut our ability to pay higher prices for oil (energy), and thus reduce exploration and development of higher priced oil sources.

That's why I don't think the price of oil will ever exceed 147 again. The economy is simply not strong enough to withstand that high a price. As demand increases in developing countries and depletion marches on, the price will approach something like 125 and then some Lehman type news will send a shockwave through the markets and the price will suddenly drop again as it did in 08. But not into the 30's this time, just as the price could not go as high, it will probably drop into the 50's. The maximum parameters of oil price was set in the first crunch in 08, and subsequent price volatility will lie between those numbers (in my opinion due to increased investor knowledge).

If that is true, and the next pulse is 125/50's, then that will set another parameter for the next volley not to exceed 125 or drop lower than the 50's.

That sounds like we are headed for stability of oil prices, but the reality is much worse. As price cannot exceed a certain amount due to the weakness of the economy, then it reduces the viability of places like you mentioned in Kazakhstan.

TOD should estimate prices needed to develop for all marginal fields, like Kazakhstan, heavy oil out of Venezuela, tar sands out of Alberta, etc. This would start to narrow the total amount of recoverable oil available due to economic factors resulting from peak oil.

It may also come to pass that after the 2nd pulse down, the world will come to understand peak oil. They will no longer wrongly blame the speculators, understanding that all investment is speculative. Instead there may be efforts to stabilize price by setting limits. The problem with that again is it reduces incentive to develop marginal fields, and we are then stuck with only developing easy fields and those already producing.

I wish you were right, PE, but unless you add "adjusted for inflation" I fear not. It looks to me as though Geithner, Bernanke and Obama want hyper inflation badly enough to force it, even with the downward pressure of a depression!

Earl, those are my sentiments exactly. Oil gets too high and the economy knocks it back down again. It gets too low and no one can afford to produce it at the high prices it takes to get the remaining oil out of the ground. As the article states, we are in a box.

And of course peak oil means, within a few years anyway, peak everything else. Everything that takes oil to produce will decline right along with the decline of oil. And the process has already started. It started slowely in 2005 then picked up speed in 2007 and 2008. We are now in a brief pause which many people think is a recovery. But an email I received today called the market a "Ticking Time Bomb". He wrote:

Look beneath the surface of the so-called recovery and you'll see enough trouble brewing to make the subprime market meltdown of 2008 "look like a walk in the park."

We are now in a brief pause which many people think is a recovery. But an email I received today called the market a "Ticking Time Bomb".

That's my take on it too. I think when past recessions occurred due to high oil prices, they were followed by lower prices that enabled expansion. But now with prices at 6% of GDP, the historical tipping point of causing recessions, we are stuck in a non-expansive mode with the clock ticking towards another drop off point. I fear investors that have thrown their chips into the Wall Street pile, will get them flushed out of their grasp in the not too distant future.

I sure hope it won't be a harder fall than the previous one. Please be a softer crash! Of course though, once a boxer has had his ribs busted hard like our economy did, it will probably take a softer blow than one would expect to get it to drop to one knee. Will the 2nd drop down be the coup de graux to our economy? Or, will will it stand back up and take an eight count to fight yet another day?

This is exactly why I keep saying that it really doesn't matter all that very much how much oil is actually in the ground at this point. We've reached a "tipping point" or "Paradigm shift" or whatever other buzzword du jour you want to use for it, but the fact is that the world has changed, and in particular the economics of oil has changed. The real issue isn't going to be how much oil is in the ground, but rather how much we can afford to get out.

Exactly, WNC! And, so long as a significant portion of the oil in use is for toys and optional crap, we can cut back when prices go high, as we have, bigtime, twice. Once at the end of the 70s, and once last year. Soon, though, we will be into necessary oil... oil we cannot 'live' without. That is the "peak" that scares the stuff out of me. And, IMO we are close, now.

Which is why we need to examine what we use oil for, and eliminate the nonessentials so we can go forward on a more sustainable. Eventually, of course, we must find alternatives for the things that are 'necessary' today. Or learn to do without.

What, in your opinion, would be the most important use for oil, when things get really dicey?

zap -- I understand your point. We can cut the non-essential oil uses. In fact, higher prices will force those cuts obviously. So one problem (higher oil prices) will be replaced by another problem: higher unemployment. We've chatted about it before: we have a large portion of the population delivering non-essential material/services. Even if the cuts were restricted to motor fuel that would lead to increased unemployment in many areas: motels, restaurants, travel destinations, auto repair, and many more areas I can't think of. I can't begin to quantify the magnitude of this fall out. But others have related GDP to energy consumption. If the connection is that strong then how do we cut consumption w/o cutting jobs.

As other have described we have a number of available reactions to higher oil prices but no real solutions.

If the connection is that strong then how do we cut consumption w/o cutting jobs.

Rocky, I am guessing here. And, I have several thoughts.

First of all, the entire Age of Oil has been a rip off from the start. It made workers more efficient, and allowed owners to exploit their labor. For all of our efficiencies, working hours have been stagnant for almost 80 years. People are paid so little that they must work 40 hours - or more - to sustain themselves, while the top 1 to 2 per-cent skim the cream off the top. So... one way would be to cut profits, cut hours, and pay a working wage. That way, some consumption beyond food and clothing would continue to be possible. I'm afraid that without a good wage, no one will be able to purchase much except necessaries, and diminishing numbers of those. Riches to rags, you might say!

Also, as energy sources dry up, animal energy becomes more important, for farming and for transportation. Requiring more human laborers to run the animals. It will take more farmers to produce for the surviving population, so many of those workers would enter the wide world of agriculture. Also, as the cost of transportation increases, overseas jobs will have to come back. Not just farming, but weaving, pottery, sewing, and all of the crafts that will become important again.

As we leave the automobile era, and look to public transportation, there will be a need for bus drivers, train engineers, electrical repair people for their propulsive engines, etc. Gandy dancers, for heavens sake! If you want to see the future, look to the past!

I am not optimistic about EVs, since their batteries either require rare metals, or lead. Lead is an environmental nightmare! Having said that, we may see widespread use of the older style batteries, which are recycleable, and there are new enterprises waiting to be started there as well. As we make the necessary adjustments to diversified electrical power, governments and perhaps private transportation companies will add jobs in support of all of that.

The real difficulty is that there are way too many people on the planet - Malthus was not wrong, except for timing. Since the end of fossil fuel as a primary energy source implies that our numbers will come down, one way or another, I tend to believe that undertaking may be a big industry for a while. Sadly.

zap -- appreciate the detailed reply. Doomerish or not it's difficult to ignore the reality of the situation. I agree: we are caught in a well made trap...made by our own ingenuity. But lacking a willingness to look more than a few decades down the road. Perhaps just an inescapable character of mankind. We are capable of change and adaptation. But only in a long enough time frame which I doubt we'll have. Maybe if we have enough near misses folks will get the idea. Maybe.

Which is why we need to examine what we use oil for, and eliminate the nonessentials so we can go forward on a more sustainable. Eventually, of course, we must find alternatives for the things that are 'necessary' today.

I think effort expended on activities like this will be a good way to keep some people distracted from the agony occuring all around them. But mostly I think that we won't do that because that time has passed. Who among us feels adequately prepared for what we believe lies ahead?

I mull over all this information on a daily basis, as I'm sure many of you do. Lately, it's enough that I understand what's going on AND know that my knowing will not change how the future unfolds for humankind. Like Greer said, it's a predicament, not a problem... or more so, it's something to adapt to, not something to solve.

The human experience is rapidly morphing into some otherness. Good luck to us all getting prepared for that.

I would be inclined to agree with you about the 'necessary' oil limit being close if we are talking about the way ,say, the US 'living arraingemnt' is currently configured.

If you intended that it will be unlikely that a significant investment in a transition to a much lower oil consumption arraingement is going to happen in the tanking and unrecoverable economic system that the US has today I also agree.

As to whether the US could go to a 'necessary' oil consumption level of say half of current consumption w/o massive new investments I actually believe it is possible. It may even be necessary.

Ad hoc car pooling or bus pooling, heaving cutailing of long haul trucking esp. for about 3/4 of the plastic crap and junk food which stocks the store shelves, the demise of mass commercial airlines, electric and conventional bike commuting, full ultilization of public transit and rail freight are on the partial list.

Probably a lot of this is happening as the depression takes hold and as unaffordable oil takes hold. I think the perception of what is necessary and what it would really take to keep going on as local a level and as efficient a level as possible are still a long ways apart. (I saw a ton of fuel efficient 2 and 4 wheel vehicles getting hauled out of the weeds, more public transit, and more bike riding when $4 gas hit)

Perhaps the perception that it could be done and the number of service and other jobs lost are huge barriers but it could be that other ,more appropriate, types of 'jobs' are being discovered. Appearences, laws, culture, and pride may be some of the biggest hurdles. Either way we probably both agree wrenching change is coming and ,no, I don't think most folks are going to enjoy it.

Realistically, things will be dicey. Hopefully we can transition to something sustainable before we are all dead. Probably it will take at least a massive die off, since we are already in a place of difficulty with no signs of change. The question, to me, is whether the planet will insist we leave.

According to Alan Weisman, author of The World Without Us, the answer is yes. Turns out cockroaches, particularly in northern environments, will die out without human waste and warm sewers. Poor creepy-crawlers...what a legacy!

I was reminded of a line at the end of "Avatar" when the US military loses the battle with the Na'vi and is filing into the spaceship to go back to Earth:

Jack Sully: "the aliens went back to their dying world"

Apparently James Cameron, at least, feels that we won`t be missed!

That line was quite a shock to me. I think it was supposed to be. "Hey that`s our planet he`s talking about!"

Did you all notice the two times "Avatar" mentioned "energy flows" (Sully is describing what he has learned from the Na`vi). This movie was a huge effort to educate ordinary people about peak oil IMO. I hope it will succeed. I was really dumbfounded by the movie, quite awed by the power of art to craft a message that someone who can`t even spell "petroleum" can understand. Readily.

I hope it will succeed. I was really dumbfounded by the movie, quite awed by the power of art to craft a message that someone who can`t even spell "petroleum" can understand. Readily.

Yep. It is starting to attract a lot of rightwing angst. The pope thinks it promotes nature worship. The neocons don't like the anti-colonial message. But I don't think it was the US military that was defeated, they were the future equivalent of Blackwater (mercenaries for hire). I don't think people took away the peakoil message, although some feeling about the futility of our industrial life, and greater appreciation for nature should increase their receptivity.

The scientists like the movie, because the scientists actually were acting like scientists. Yet another way to piss off the right.

In an article on the planned rail line along the Arab side of the Persian Gulf, this quote:

Power [electricity], generated usually by gas, is deemed more expensive due to shortage of sources. Qatar is the only gas-rich country in the six-country group and most of its supplies are locked up by a moratorium study

Since Saudi Arabia (over half of the rail km) burns crude oil for electricity at times (mostly NG), this makes sense.

The journalist is a bit confused at times in his wording (the decision is diesel trains at 200 kph (120 mph) or electric trains at 350 kph (210 mph). Not mentioned is that freight can be run on a 200 kph rail line, but not on a 350 kph rail line (unless straight and flat all the way).

I guess in some ways it isn't all that relevant to our situation. For one, it is in Las Vegas, and secondly it was poorly designed and hidden so that it is actually hard to find the stations. It doesn't go to the airport, and is more expensive than taking the bus.

I think the failure of the Las Vegas monorail is mostly the result of the economic state of Las Vegas.

Over and above that, monorails don't make a lot of economic sense as transit systems. They're constrained by technology to operate above grade. At-grade systems are a lot cheaper (1/4 the cost). Light rail is the way to go as the starter rapid transit system for a city.

Cities who don't already have them should be looking at building a low-cost starter rapid transit system, to prepare for what's coming in the post-oil era. Most cities aren't.

I'm a true rail buff. On grade is fine for heavy freight. If you try to put heavy on the same traction as passenger, you have problems. The only way I see for long distance, fast, rail travel is to put the light weight, fast trains, above the slow, freight trains. The freight trains are simply too heavy for the pylons, etc., and they slow down traffic for passengers and light weight haulage. That is why our passenger system broke down. The money was in carrying loads, and it takes too much to stop and start a 100 car train. Using the same r.o.w., it is impossible to schedule fast trains.

B/c it was so slow, train service lost out to air service. Now, with energy becoming every greater a problem, electrification of rail service and some fast long distance mass transit will become important if we want to keep any national identity. Eventually that may be impossible, but even then connections on the Continent will be better served with such a system.

I don't really think Julian Comstock's future has much chance, b/c we will have exhausted too much coal. By that time (2165-2200) if there is rail travel it will be either hydro, geothermal, solar, tidal or wind- electric powered. Of course, we won't see it, but we should start planning now so that our grandchildren have a chance to get it right. Or at least better than we have done.

On grade is fine for heavy freight. If you try to put heavy on the same traction as passenger, you have problems. The only way I see for long distance, fast, rail travel is to put the light weight, fast trains, above the slow, freight trains.

The cheap way is to drop a couple of rapid-transit tracks into the same right-of-way as freight railroads. US regulations more or less forbid doing this, but in Europe they actually run rapid transit on the same tracks as freight railroads. The technology to do this exists, it's just a matter of changing the regulations to allow it.

The high-speed systems usually have their own ROW, but that's because the parameters are different. You want high speed lines to be as straight as possible, whereas you want freight railroads to be as level as possible. High speed trains can handle very steep grades because they have a very powerful electric motor on every axle. Some of the French high-speed lines have speed restrictions on the top of hills because, if they went over at full speed, they would leave the tracks and become airborne.

By that time (2165-2200) if there is rail travel it will be either hydro, geothermal, solar, tidal or wind- electric powered. Of course, we won't see it, but we should start planning now so that our grandchildren have a chance to get it right.

Huh? You might not see it, but I did. Before I retired, I rode wind-powered electric light rail trains to work for years. Vancouver's SkyTrain system is hydro-powered. The technology is here, now. If someone wants to build a wind-powered or hydro-powered electric train system they should just go out for bids, and pick the lowest bidder. The technology already exists.

What's missing is the political motivation. If the politicians wanted to do it, and were willing to raise taxes to do it, the engineers would do it. If the politicians don't want to do it, get used to not working, because you won't be able to afford to drive there.

The Swiss plan to run 300 trains/day, at speeds from 100 kph (62 mph) to 240 kph (149 mph) through a 62 km long tunnel (dual tracks). The Swedes are talking about 400 trains/day accross their link to Denmark plus trains to Malmo, the entry point.

I am not a fan of gadgetbahn. Monorails have a small viable niche but are not generally useful.

I would like to see a plan like CSX's for DC to Miami. Two regular freight tracks plus one higher speed (100-110 mph) for pax and express medium density freight (fruits & veggies, e;lectronics, etc.)

I am not a rail buff, or even a rail fan. I saw what trains could do and the problems they can solve. But no emotional draw. No toy trains as a child. This gives me a different perspective.

Alan;
If you're still checking in today, I thought you might be interested in this Maine story.

Got any suggestions? Not much moving out of our forests to keep those wheels rolling, so how do we put the railbeds on ice until the need becomes more obvious? Any TOD regulars want to join up and buy a railline in Maine?

..Barring a viable suitor to take over the lines, Atlantic Northeast Rails and Ports editor Chop Hardenburgh says he only sees only one saviour, and that would come in the form of a marked increase in the price of deisel fuel.

"When the price of deisel was up over $5, the railroads were getting phone calls from people they heard from before, because the trucking price had gone so high, but it needs to come back to that and much more in order to make this viable," Hardenburgh said.

Get Rails to Trails grant with unique proviso that rail infrastructure will be left in place for X (20 ?) years and that the track can be reactivated in that time, but the trail stays in perpetuity.

Contact Newfoundland (which wants to transmit power south from new dam) and see if they would like the ROW (again same proviso).

Offer tax free financing (and property tax holiday) to the customers (timber companies mainly but also oil & propane distributors) if they will take it over and operate it as a co-op. The value of their standing timber declines if the RR goes away. Also include other parties with an interest (connecting railroads, New Brunswick).

Create "Maine Public Belt" like a toll highway. Anyone with a license can operate a train there if they pay the toll. Also, toll trucks on some highways (raises cost of competition and new revenue).

Point out to State of Maine that less rail means more trucks and more damage to highways (trucks do not come close to paying for their damage).

A government should never, ever give up a railroad right-of-way. If all else fails, they make great bicycle paths. If the railroad objects to the government refusing them the right to abandon it, the government should suggest that the railroad return all those land grants they were given back in the 1800s.

The state has no money

A state has as much money as it wants to take from the people in the form of taxes. What they are really saying is that they don't want to do it because it doesn't give them enough votes.

Less credit, more cash.
The end of the monthly payer.
Greater suspicion.
More resourcefulness.
Less brand loyalty.
Smaller is bigger.
A rental rebound.
Less window shopping.
More closet shopping.
Decluttering.
Food frugality.
More gardening.
Less waste.
Less healthcare.
More negotiating.
More volunteering.
Redefining success.

Duany began by identifying three concurrent crises that he traced directly to the American lifestyle: Peak oil (the likelihood that we've already consumed more than half the planet's petroleum in barely 100 years), the housing bubble, and global climate change. "It's where we live, the size of our houses, the distances we drive for work, commerce, play--everything."

the spelling police finally inspired to post by the constant reference to hydraulic fracturing as "fracking" in the MSM.
Just say fracture or abbreviate to "frac".
The actual issue is cementing of casing strings and testing properly with a documented FIT(formation integrity test).
Correctly done for each casing string there will not be migration up to the water table of the frac fluids.

Fracking was a common occurrence in the early Battlestar Galactica episodes. Later it lost a "c" and they indulged in a lot of frakking, as in, "You frakking crazy idiot!", "You miserable frak!", "What a clusterfrak!", "You motherfraker!", etc.

However, in the oil industry it's usually spelled "frac", short for "fracturing" - which is what us done to the rocks in the formation.

Unless something goes seriously wrong with the process, when the other "F" word gets used a lot.

Interesting item, on the Himalayan glaciers. It makes an important point, and that is that every statement of fact is subject to review and even supposedly 'scientific' evidence is, in particular, conditional. Hence the common application of "IMO" on TOD.

It goes without saying, that when posting an opinion, I could be wrong. In my more pessimistic posts, I truly hope that to be the case. We all try to be realistic, and sometimes we misread or misinterpret, as some UN members may have done (reading 2350 as 2035). Perhaps a typo in an article read would have similar impact. In every case we should remain skeptical and open to new data.

GW deniers will use this to "prove" that the glaciers aren't melting, but, of course, this means nothing of the kind. It only means that the timing previously reported was based on supposition rather than data. There is plenty of evidence that the ice is melting all over the world, but, as usual: "one awshit is worth ten ataboys".

The analogy I like to use is something along the lines of: The experts were wrong--if we drive into this bridge support at 100MPH we won't die from head trauma, thanks to the airbags. The car will erupt in flames and we'll die a slightly slower, even worse death, BUT THE EXPERTS WERE WRONG, SO KEEP DRIVING!!!

It is great news that these glaciers that support 1 to 2 billion people including myself will not be gone by 2035, personally I feel my fear growing rather than subsiding.

I really hope that climate change is not happening but events around the world suggest that it is. To make it worse neither are we prepared nor are we willing to take any preventive / corrective action.

When news like the Himalayan glacier article in question comes out it simply demotivates people even more from taking any action. People who have been trying to spread awareness become the laughing stock and get demotivated, like I am currently, though I am sure will bounce back. People who have not been exposed to enough news, history and science tend to take all these matters as a joke and will be harder to convince here on.

The net effect it has, I fear, is a very negative one, while the world definitely seems to be moving towards climate change / economic crisis / energy crisis, nobody is prepared and thanks to such good news, when the effects become more apparent there will be fewer so...

I have to agree. Though, even if the errant date (2035) was correct, I see absolutely nothing to indicate that it would matter two hoots in hell. No one (or perhaps "far too few" is a better term) cares, and nothing would be done anyway.

Still... if more care had been taken, one less awshit might make some difference, somewhere. Maybe enough to postpone or delay or mitigate the damage being done! Maybe...

When news like the Himalayan glacier article in question comes out it simply demotivates people even more from taking any action. People who have been trying to spread awareness become the laughing stock and get demotivated, like I am currently, though I am sure will bounce back. People who have not been exposed to enough news, history and science tend to take all these matters as a joke and will be harder to convince here on.

Thats the whole point. The vast majority of people won't learn the science, but will pick up that certain people are calling the scientists bad names. The emotional connection to distrust the scientists is the desired effect. Then they can promote business as usual. I don't think the common man has reinforced his thinking processes to withstand a well funded and well run disinformation campaign as is being run here. I think science in the USA is beginning a major decline. Hopefully the Asians will take up the slack, because we are rapidliy giving up.

Having looked at them close up, I would say that the Himalayan glaciers are not melting very fast, compared to some other glaciers I have seen. I would not expect them to disappear in my lifetime.

Glaciers are transient features of the landscape. They grow and shrink, they advance and retreat, they disappear and reappear. You shouldn't get concerned unless they expand over the continent and crush your home town, which in my case is a possibility. Fortunately it's a retreating possibility.

They really don't have a large effect on the overall hydrological balance of a region, contrary to what some alarmist dimbulbs are saying.

Life was particularly difficult for those who lived under the constant threat of advancing glaciers in the French Alps. One, the Des Bois glacier on the slopes of Mont Blanc, was said to have moved forward “over a musket shot each day, even in the month of August.”

A number of Swiss villages were bulldozed out of existence by glaciers during the Little Ice Age. The Mont Blanc area is classic for this. The villages in the area (I've been in some of them) were quite frightened when the glaciers were advancing. A glacial advance is not to be snickered at. Glaciers can advance by 30 m (100 feet) per day when conditions are optimum.

At this point in time, most glaciers are receding. However, I wouldn't assume that this is going to continue indefinitely. The world's climatic systems are more complicated than most people realize. I've seen glaciers appear out of nowhere in the past few years, so I'm not going to take anything for granted.

Remember that last week Goldinsacks let us know that that we peak oilers are "naive," too. Wonder what percentage of their staggeringly ridiculously huge intake is working the commodities market. It's all on such a scale you can't really take it in; I feel like one of those very minor species whose ecosystem covers a score of acres, trying to grasp the scale of the Amazon rainforest the ecosystem resides in. Or, it's like reading about the scale of the cosmos.

It’s already bitterly ironic that Bill Clinton is the United Nation’s special envoy to Haiti, after the economic policy he imposed there to transform it into the Caribbean’s sweatshop. Now, President Obama has asked George Bush to lead fundraising efforts for relief in Haiti. After Bush took part in an international coup to overthrow Aristide. It’s like sending in the horsemen of the apocalypse to negotiate peace.

The other Clinton was down there making a speech "We are here at the invitation of your Government to help you". In the meantime things are getting much worse.

The Navy sent my first ship there in '79(?) after Hurricane David to help distribute relief supplys. We weren't well recieved. The second day a group of our shipmates came under attack from rock throwing mobbs who thought we were there to prevent looting. One of our guys was hurt pretty badly. Needless to say, we left them to their chaos and misery.

evnow - Jared Diamond's writing about Haiti and the D.R. was my favorite part of "Collapse".

Often times I find Kunstler a little over the top but I think today's Klusterfuck Nation got it exactly right:

For decades, the USA's policy (and the UN's too) was just to stuff more food aid onto an island already so far beyond its carrying capacity for human existence that every new birth certificate was a death warrant in disguise.

I felt last week that when the earthquake occurred in Haiti it was the ghost of x-mas's to come. Yet the U.S. government rushes in with band-aids and bottled water for a nation that is dying of cancer.

Only 3 real choices:

1. Let em starve
2. Feed em' til' we're so poor we can no longer support them and then even more die
3. Let the population emigrate and be prepared for an explosion of Haitians in the U.S

Wouldn't it be cheaper to provide incentives for birth control such as payments or food for those who do not have children? Combine that with family planning, vasectomies, etc. and that would make more sense than just shoveling more food down a rat hole.

Something will be done and millions will be spent. Since much of the aid is spearheaded by religious groups it probably did not occur to them by achieving a better future through birth control. It would not be very expensive to install a serious birth control program with incentives given the fact that the average daily income is two dollars.

But we don't even have a rational population control policy here in the U.S. as we still provide incentives for more children. I am tired of subsidizing people who choose to have lots of children through dependent deductions and family plans for health care that don't take into account the number of children.

I am tired of subsidizing people who choose to have lots of children through dependent deductions and family plans for health care that don't take into account the number of children.

I heard mention on the drumbeat last week that China's one-child policy has paid a significant dividend to their economy. It makes sense if you consider that all of those fertile couples have channelled those precious resources and energies into lifting their economy.

From Crain's ChicagoBusiness: Illinois enters a state of insolvency (ht Walt)

While it appears unlikely or even impossible for a state to hide out from creditors in Bankruptcy Court, Illinois appears to meet classic definitions of insolvency: Its liabilities far exceed its assets, and it's not generating enough cash to pay its bills. ... "I would describe bankruptcy as the inability to pay one's bills," says Jim Nowlan, senior fellow at the University of Illinois' Institute of Government and Public Affairs. "We're close to de facto bankruptcy, if not de jure bankruptcy."

...Despite a budget shortfall estimated to be as high as $5.7 billion, state officials haven't shown the political will to either raise taxes or cut spending sufficiently to close the gap.

... Unpaid bills to suppliers are piling up. State employees, even legislators, are forced to pay their medical bills upfront because some doctors are tired of waiting to be paid by the state. The University of Illinois, owed $400 million, recently instituted furloughs, and there are fears it may not make payroll in March if the shortfall continues.

Hey, Wes! I remember way back around 1970 or so, when Illinois passed its very unconstitutional State Income Tax. The Sup Ct of Ill. wrote an opinion that I described as "backwards, and in Sanskrit" in order to make it legal, and we predicted then that it would only enable the legislature.

Israel raises water rates 25% with another 16% increase scheduled for June to pay for the incorporation of desalinated water into the national water system...and its still not enough. It never will be.

Nonfiction narrative set in the Kalahari dramatizing the timeless struggle over water, the fulcrum of political power. Facing drought, scarcity and climate change the besieged indigenous Bushmen use voluntary survival strategies while Botswana’s government enforces regulatory rule. Their rivalry foreshadows our world, where two in three thirsty humans will soon endure shortages, resource conflict, a $900 billion market, and a global fight for water as a human right.

"Despite the rate increase, Mekorot’s CEO believes it is not enough to allow the company to cover its costs."

If you heard the same thing from the CEO of XYZ Inc, would you believe it?

So even though it may be absolutely true, it will not fly until the company goes under and it is found his "belief" is true. When people are going without drinking water,the raise to cover costs will be easy to make and everyone will cheer.

Many states (most notably Florida, California, and Texas) and cities are actively researching and investigating the feasibility of large-scale desalination plants for municipal water supplies.

Desalination and its different applications, however, come with their own sets of risks and concerns. Although the costs of desalination dropped steadily in recent decades, making it more competitive with other water supply augmentation options, the declining trend may not continue if energy costs rise. Electricity expenses vary from one-third to one-half of the operating cost of desalination facilities. Reducing the energy requirements of desalination would decrease its cost uncertainties. Substantial uncertainty also remains about the technology’s environmental impacts, in particular management of the saline waste concentrate and the effect of intake facilities on aquatic organisms. Moreover, there are few federal health and environmental guidelines, regulations, and policies specific to desalination as a municipal water supply source.

Well, D & G, the only thing missing from that item was a statement of how much energy it takes to manufacture the carbon nanotubes and silver wires ... It certainly doesn't sound cheap, easy, or ready to deploy. Though, I will admit that it sounds really great.

die off. i think i will contemplate that concept. it seems to be one of the new buzz words bandied about by pundits these days. i guess it is meant for others than the pundits bandying it about.
die off. did i mention die off? yes. die off.
OH! did you reduce your lifestyle today? well, did you? was it because of a natural disaster or was it because you wanted to? (it's a trick question)
and now for something totally different. of late i have been harping about titan, a moon of saturn.
it is covered in hydrocarbons. FART! i just discovered that uranus has oceans of diamonds. let's build spaceships and go get them!http://news.discovery.com/space/diamond-oceans-jupiter-uranus.html
and leave us not forget the golden asteroid. there has to be one. it is a black swan. gold man sacks should be investing in telescopes to search for it or else those boffins may have to reduce their lifestyles (or should i say they may have to reduce our lifestyles).
i read that some meteorites are made of carbon containing minerals. there may be an asteroid out there with enough carbon containing minerals to mine. and why not? it is our manifest destiny to consume the cosmos.
you oil conundrummers are just plain parochial. gotta take in the BIG view.
"it's all good"

George Will is happy to take any position that lets him Paternalistically rain on someone else's parade. 'So sorry to have to break it to you..' is the tone that puts the best gleam onto those Specta-cules.

The online Toronto star article on Canadian manufacturing falling because of Tar Sands production and the rise of the Canadian dollar based on those exports smacks of very sour grapes.

quote:
A recent study by a University of Ottawa professor and others estimates that 42 per cent of the job loss in Canadian manufacturing over the last few years resulting from the rise in the dollar can be attributed to our rise in oil exports, and identifies the computer and electronics, textile, transportation, machinery, paper and plastics sectors as those most affected. Ontario and Quebec are home to the majority of these industries.

It makes no mention of outsourcing by multinationals to whatever country is cheaper to operate from.

The history of Canada is one of funneling the wealth of the West, Prarries, and East Coast into the establishment Ontario. Main Street supports Bay Street.

You can bet if the tar sands were part of Ontario, it would be the greatest discovery since sliced bread. Much of the west remains angry over the resource/money grab from the NEP (National Energy Program) from the 70s....a blatant cash grab of resources that had a crippling effect on resource development.

One does not have to look too hard to find westerners who talk of leaving confederation, and who feel more aligned to Cascadia, or a loose association with Oregon and Washington. It could happen if national identities disintegrate under a declining economy....a reset, if you wish.

From memory, 1.5 million b/day is from Kashagan (delayed since original 2005 date). This oil will be phased in over several years (as most projects are). However, Kashagan will be phased in over a longer time period than most.

Take that graph and subtract 1.5 from 2012 and it looks worse, much worse.

Ace, concerning your price chart above; you are forgetting one very big thing. See that sudden drop in prices? That was caused by the economy! The economy will cause a similar drop if it ever gets that high again.

You are also overlooking the changes which have occurred over longer time periods. Recall back in the 1970's when the price of oil spiked, followed by a severe recession. Again, after the 1979 Iranian Crisis, oil prices spiked again, followed by another recession, which turned out to be even worse than the one in 1975. A few years after both spikes, the growth in oil consumption had wained as the various segments of the economy responded to the spikes. Add in cheating by OPEC members and the fact that Saudis flooded the market and the price of oil fell to about $10 a barrel and people mostly forgot about the problem.

This time, if those of us in the Peak Oil camp are correct, there won't be any increase in consumption as the economy adjusts to the recent round of higher oil prices. And, there are many more consumers out there than in the 1970's and early 1980's. As sure as winter follows summer, it's likely that the price of oil will climb yet again, reaching a point at which the latest conservation efforts are insufficient to keep the economy going, leading to another round of recession, followed by lower oil prices. Rinse and repeat, as the saying goes.

One might expect to see this process continue with something like a stair step upward trend in oil price and a stair step downward spiral in economic activity. Of course, we can also hope that the alternatives may come to the rescue, but the alternatives can not easily replace oil. Much of what we in the US think of as normal activity is based on machines which use oil. When the oil is no longer available to power those machines, the activities which depend on those machines will simply not be possible. That does not imply that other machines using other energy sources can't fill in.

The part about learning from history also includes learning that other solutions are available. Whether or not those solutions can be phased in fast enough or whether those solutions can supply the needs of even the present population is the subject of continual debate around TOD. I think those of us who post on TOD are NOT missing these lessons of history...

You are right, the severe economic slowdown in 2008 caused demand to fall below supply, triggering a collapse in oil prices to below $US40 in Dec 2008.

My forecast assumes that world economic growth will be small but positive causing an increase in forecast notional demand. If there is another world economic slowdown causing demand to fall below supply then prices could fall again. One thing is for certain is that there will be high volatility in future oil prices.

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